14 DAY TRIAL // The recession may have officially passed, but tech companies, like many companies of different sort, still haven't exactly stabilized their operations, not enough to escape the need for operational cuts. Intel, apparently, is among those companies.
We probably shouldn't be surprised at this point. Even though Chipzilla has been doing better than before on the mobile front, it still gets most of its revenue from PCs and server/industrial systems. And with PCs still declining in sales, some consequences are expected.
Which brings us to the matter at hand: Intel has decided to close down the assembly and test unit it has in Costa Rica, a country in Central America, Bloomberg reports.
It is part of the company's plan to reduce its global workforce by 5% by the end of the year (2014).
Currently, 2,500 people work at the testing facility, but Intel won't be firing all of them. The ones getting the pink slip number 1,500.
The remaining 1,000 will be transferred to other departments, like R&D (research & development), human resources and finance. For those who want to put things into perspective, Intel finished 2013 with 107,600 employees.
If the market for PCs continues to shrink, Chipzilla may decide to further reduce its global manpower in 2015. We'll have to wait and see though.
Meanwhile, the assembly and test work will be carried out by Intel's sites in Malaysia, Vietnam and China. As one can see, the company has quite a few of its operations based in Asia.
The most advanced operations, so to speak, are still in the US though, specifically Oregon, and the corporation also owns buildings in Israel and Ireland.
It's still a bit odd that Costa Rica is getting erased, though, because it's been an important facility for high-end CPU testing for years.
Intel spokesman Chuck Malloy said that Intel's ultimate goal was to “be more efficient and effective.” Not that different from what all other companies say when they cut jobs.
Considering that the human labor in Asia, China especially, is cheaper than in the rest of the world, we can see some sense in the decision, even if job cuts are never a happy thing.
Whether or not job cuts beyond the intended 5% are necessary will be decided by the success of the latest and upcoming product releases, like the 14nm Braswell Atom SoC and Haswell Refresh CPUs that will come out in the near future.